Trump Signs Law to Halt Medicaid Millions Wasted on the Dead

Paul Riverbank, 12/24/2025Medicaid mistakenly paid millions to the deceased, exposing persistent tracking flaws. A new law promises better cross-checks, but the larger debate around corporate pay, taxpayer responsibility, and privacy remains unsettled.

Here’s what happened: Between July 2021 and July 2022, Medicaid programs across the nation paid out $207.5 million on behalf of folks who’d already died. The tally climbs close to $289 million in improper payments since 2016, based on an assortment of state and federal audits. Anyone covering statehouse politics—or just living in a state with a big Medicaid budget—has likely heard whispers about this before. But why do these errors stubbornly repeat?

Part of the answer sits in the byzantine world of eligibility databases. The Social Security Administration’s Full Death Master File is supposed to help weed out deceased individuals. Imagine a vast ledger, listing over 142 million death records stretching back to just after the Civil War. Keeping that data locked down makes sense for preventing identity theft—no one wants their family’s information floating around. But this privacy firewall has slowed efforts to ensure that only the living receive benefits.

Congress has tried to navigate the trade-off, and after much debate, lawmakers rolled out a new solution tucked inside the capstone One Big Beautiful Bill, which President Trump signed into law not long ago. Starting 2027, states will have quarterly access to the master death file. That should, in theory, help cut off payments to departed Medicaid members more quickly, plugging a costly hole.

It’s easy to get lost in abstract numbers, but here's a concrete sign this might work: The Treasury Department ran a five-month trial using that comprehensive death record and clawed back $31 million that had been routed to the deceased. Not pocket change, and proof that sharper tools can make a dent.

Not everyone is focused purely on the mechanisms of eligibility, however. Mark Cuban—a name more associated with NBA courts or tech startups than Medicaid rolls—recently sparked a conversation from a different angle. He’s less concerned about government roles and more about how some of America’s best-known companies pay their workers. “If employers pay so little that full-time people qualify for Medicaid, that’s not capitalism—it’s a payroll subsidy dressed up as a free market,” he argued. Cuban isn’t shy: He wants to see companies publicly named if their wage scales are so low that taxpayers wind up picking up the slack.

Walmart, McDonald’s, Amazon, Burger King, Dollar General—these are the companies that pop up, time after time, in government audits and state reports as top employers whose full-time staff often need public assistance programs like Medicaid or SNAP. That recognition can sting, but the numbers are what they are. The conversation inevitably shifts: Are these public programs patching legitimate cracks in the economy, or are they concealing bigger structural problems?

There’s another wrinkle: the trustworthiness of that essential master list of the dead. The Social Security Administration, aiming to foil possible fraud, has occasionally deleted and restored thousands of records, leading to some controversial moments—like labeling living immigrants as dead in a bid to tackle misuse in certain visa programs. When the very tools needed to clean up Medicaid spending become unreliable, it sets off a headache for both policymakers and auditors.

At the end of the day, nobody—Republican or Democrat—wants to see tax money funneled into thin air in the name of “healthcare.” It’s about more than numbers and error rates. It’s a test of how well public institutions can keep pace with messy reality, and how much responsibility private companies ought to shoulder for their workforce. The new law helps close a loophole, sure. But in the long run, how these shifting rules reshape employers, workers, and the public safety net is still an open question. As always in American politics, the ledger doesn’t just balance itself.

It’s the sort of number that makes you stop and reread the sentence: Over $200 million from Medicaid wound up paying for the care of people who’d already passed away. That’s not from the plot of a bureaucratic comedy, but straight from a government watchdog report. Aner Sanchez, an assistant regional inspector with HHS’ Office of Audit Services, put it plainly: This isn’t just a blip in one state—it’s everywhere, and it keeps happening.Here’s what happened: Between July 2021 and July 2022, Medicaid programs across the nation paid out $207.5 million on behalf of folks who’d already died. The tally climbs close to $289 million in improper payments since 2016, based on an assortment of state and federal audits. Anyone covering statehouse politics—or just living in a state with a big Medicaid budget—has likely heard whispers about this before. But why do these errors stubbornly repeat?Part of the answer sits in the byzantine world of eligibility databases. The Social Security Administration’s Full Death Master File is supposed to help weed out deceased individuals. Imagine a vast ledger, listing over 142 million death records stretching back to just after the Civil War. Keeping that data locked down makes sense for preventing identity theft—no one wants their family’s information floating around. But this privacy firewall has slowed efforts to ensure that only the living receive benefits.Congress has tried to navigate the trade-off, and after much debate, lawmakers rolled out a new solution tucked inside the capstone One Big Beautiful Bill, which President Trump signed into law not long ago. Starting 2027, states will have quarterly access to the master death file. That should, in theory, help cut off payments to departed Medicaid members more quickly, plugging a costly hole.It’s easy to get lost in abstract numbers, but here's a concrete sign this might work: The Treasury Department ran a five-month trial using that comprehensive death record and clawed back $31 million that had been routed to the deceased. Not pocket change, and proof that sharper tools can make a dent.Not everyone is focused purely on the mechanisms of eligibility, however. Mark Cuban—a name more associated with NBA courts or tech startups than Medicaid rolls—recently sparked a conversation from a different angle. He’s less concerned about government roles and more about how some of America’s best-known companies pay their workers. “If employers pay so little that full-time people qualify for Medicaid, that’s not capitalism—it’s a payroll subsidy dressed up as a free market,” he argued. Cuban isn’t shy: He wants to see companies publicly named if their wage scales are so low that taxpayers wind up picking up the slack.Walmart, McDonald’s, Amazon, Burger King, Dollar General—these are the companies that pop up, time after time, in government audits and state reports as top employers whose full-time staff often need public assistance programs like Medicaid or SNAP. That recognition can sting, but the numbers are what they are. The conversation inevitably shifts: Are these public programs patching legitimate cracks in the economy, or are they concealing bigger structural problems?There’s another wrinkle: the trustworthiness of that essential master list of the dead. The Social Security Administration, aiming to foil possible fraud, has occasionally deleted and restored thousands of records, leading to some controversial moments—like labeling living immigrants as dead in a bid to tackle misuse in certain visa programs. When the very tools needed to clean up Medicaid spending become unreliable, it sets off a headache for both policymakers and auditors.At the end of the day, nobody—Republican or Democrat—wants to see tax money funneled into thin air in the name of “healthcare.” It’s about more than numbers and error rates. It’s a test of how well public institutions can keep pace with messy reality, and how much responsibility private companies ought to shoulder for their workforce. The new law helps close a loophole, sure. But in the long run, how these shifting rules reshape employers, workers, and the public safety net is still an open question. As always in American politics, the ledger doesn’t just balance itself.